USD/JPY Price Analysis: Rebounds from multi-month lows, lacks follow-through

USD/JPY staged a modest bounce from multi-month lows amid extremely oversold conditions.
The lack of follow-through suggests that the near-term bearish bias is still far from being over.
Bears might now wait for a sustained breakthrough the 104.00 mark before placing fresh bets.

Haresh Menghani FXStreet

The USD/JPY pair recovered around 70 pips from multi-month lows and refreshed daily tops, around the 104.85 region in the last hour.

Extremely oversold conditions on short-term charts turned out to be a key factor behind the pair's modest intraday short-covering move. This coupled with a positive move in the US equity futures further undermined the safe-haven Japanese yen and remained supportive.

The uptick, however, lacked any strong follow-through and remained capped below the key 105.00 psychological mark. The pair's inability to capitalize on the attempted bounce clearly suggests that the near-term bearish pressure might still be far from being over.

That said, a sustained breakthrough the 105.00 mark might prompt some additional short-covering and lift the pair further towards an intermediate resistance near the 105.65-70 region. Bulls might then aim to test weekly swing highs resistance near the 106.00-106.10 area.

On the flip side, the 104.20-15 region now seems to protect the immediate downside. Subsequent weakness below the 104.00 mark will reinforce the near-term bearish outlook and turn the pair vulnerable to accelerate the slide further towards challenging the 103.00 mark.

USD/JPY daily chart

Technical levels to watch

USD/JPY

Overview
Today last price	104.65
Today Daily Change	-0.08
Today Daily Change %	-0.08
Today daily open	104.73

Trends
Daily SMA20	106.69
Daily SMA50	107.25
Daily SMA100	107.57
Daily SMA200	108.27

Levels
Previous Daily High	105.3
Previous Daily Low	104.68
Previous Weekly High	107.54
Previous Weekly Low	105.68
Previous Monthly High	109.85
Previous Monthly Low	106.08
Daily Fibonacci 38.2%	104.92
Daily Fibonacci 61.8%	105.06
Daily Pivot Point S1	104.51
Daily Pivot Point S2	104.29
Daily Pivot Point S3	103.9
Daily Pivot Point R1	105.12
Daily Pivot Point R2	105.52
Daily Pivot Point R3	105.74

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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